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Singapore, 17 August 2023 – CapitaLand Ascendas REIT Management Limited, as the manager (the “Manager”) of CapitaLand Ascendas REIT (“CLAR”), is pleased to announce the completion of the acquisition of a high-specification Tier III colocation data centre facility (the “Property”) from an unrelated global data centre operator (the “Vendor”) (the “Acquisition”).  The Property is situated in Watford in North-West London in the United Kingdom (the “UK”). The purchase consideration^[1] for the Acquisition after taking into account the agreed value of the Property of £119.4 million (approximately S$199.9 million^[2]) (the “Agreed Value”) is £125.1 million (approximately S$209.4 million) (the “Purchase Consideration”).

2. Significantly expands CLAR’s data centre footprint in Europe

With the latest Acquisition, CLAR’s data centre footprint in the UK will increase from four to five data centres.  By value of CLAR’s assets under management (AUM), this represents an increase of approximately 54% to S$569.8 million, with 96% of the investments in the UK located in London.

CLAR’s enlarged footprint in London further enhances its strategic presence in Europe’s FLAPD markets.  Within Europe, approximately 93% of our data centres by AUM (approximately S$875.2 million) are located in the FLAPD markets.

In total, CLAR’s data centre portfolio will be uplifted by about 15% to S$1.5 billion in terms of AUM, comprising 63% in Europe (approximately S$940.6 million) and 37% in Singapore (approximately S$557.6 million).

On a pro forma basis^[4], assuming that the Acquisition was completed on 30 June 2023, the proportion of data centre properties will increase from about 7% to approximately 9% of CLAR’s total investment properties valued at S$17.2 billion.

3. Resilient income stream with investment-grade tenants

The Property is 80.0%^[5] occupied by five investment-grade tenants.  These tenants operate in various industries, including information and communications technology, retail, energy and financial services.  Three of the existing tenants have each been utilising the Property for more than 10 years.

4. Distribution per Unit (“DPU”) accretive acquisition

The pro forma impact on the DPU for the financial year commencing on 1 January 2022 and ended 31 December 2022 (FY2022) is expected to be an improvement of approximately 0.110 Singapore cents or a DPU accretion of 0.7%, assuming the Acquisition was completed on 1 January 2022^[6].

Details of the Acquisition

CLAR, through its wholly-owned subsidiary Ascendas Reit (Europe Sub 3) Ltd, has entered into a Share Sale and Purchase Agreement with the Vendor today and completed the acquisition of the total issued share capital of the Vendor’s wholly-owned subsidiary which owns the Property.

The Purchase Consideration of £125.1 million (approximately S$209.4 million) after taking into account the Agreed Value of the Property of £119.4 million (approximately S$199.9 million), was negotiated on a willing-buyer and willing-seller basis.  The Agreed Value is at a discount to the independent market valuation of the Property.

The total cost of the Acquisition is estimated to be £128.1 million (approximately S$214.4 million) (the “Total Acquisition Cost”) comprising (i) the Purchase Consideration of £125.1 million (approximately S$209.4 million); (ii) the acquisition fee payable to the Manager of £1.2 million (approximately S$2.0 million) (being 1% of the Agreed Value); and (iii) stamp duty, professional and other fees and expenses of £1.8 million (approximately S$3.0 million). 

The Total Acquisition Cost of £128.1 million (approximately S$214.4 million) will be financed with a combination of the proceeds from the equity fund raising^[7] announced on 16 May 2023 and debt financing.

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1.  The Purchase Consideration was arrived on a debt-free basis and included an 18-month rental top-up provided by the Vendor (the “Rental Top-Up”), subject to post-completion adjustments as set out in the Share Sale and Purchase Agreement.
2. An illustrative exchange rate of £1.00:S$1.67399 is used in this news release.
3. FLAPD refers to the five largest data centre markets in Europe, namely, Frankfurt, London, Amsterdam, Paris and Dublin.
4. CLAR’s investment properties are valued at S$17.0 billion as at 30 June 2023.
5. As at 30 June 2023.
6. The estimated pro forma DPU impact is calculated based on the following assumptions: (a) CLAR had completed the Acquisition on 1 January 2022 and held and operated the Property through 31 December 2022; (b) the Acquisition was funded based on a funding structure of 40% debt and 60% equity; (c) the distribution includes the Rental Top-Up provided by the Vendor; and (d) the Manager elects to receive its base fee 80% in cash and 20% in units in CLAR.
7. Please refer to the announcement dated 16 May 2023 titled “Launch of Private Placement to Raise Gross Proceeds of No Less Than Approximately S$450.0 Million” and the announcement dated 17 May 2023 titled “Close of Private Placement of 183,352,000 New Units (“New Units”) in CapitaLand Ascendas REIT (“CLAR”) at an Issue Price of S$2.727 per New Unit” (the “Close of Placement Announcement”).  Further to the Close of Placement Announcement, it is intended that approximately S$129.9 million of the gross proceeds of approximately S$500.0 million from the private placement will be used to partially fund the Acquisition, referred therein as the “Potential Europe Acquisition”.}